 Live from Cambridge, Massachusetts, it's the Cube at the MIT Chief Data Officer and Information Quality Symposium with hosts Dave Vellante and Jeff Kelly. Welcome back everybody. This is Dave Vellante and I'm with Jeff Kelly. We're here live. This is the Cube. We're in Cambridge, Massachusetts at the Tang Center. This is the MIT Information Quality Symposium. It's a symposium in a forum focused on the Chief Data Officer. This is the Cube's second year here. The Cube is a live mobile studio. It's Silicon Angles flagship program. We go out to the events. We extract the signal from the noise. Deborah Nightingale is here. She is a professor of the practice of aeronautics and astronautics and engineering systems director, socio-technical systems research center and co-director Lean Advancement Initiative. Wow. You've got a lot of stuff going on. Welcome to the Cube. Thank you. Great to be here. You gave a keynote earlier, so congratulations on getting that. So maybe talk a little bit about the keynote and what you were conveying to the audience. Okay. Well, we have an incredible group of people assembled here, but primarily their focus is Chief Information Officers, Chief Data Officers, and my work has focused on not only the information and IT piece of an organization, but rather looking at the whole enterprise a little more holistically. And it's taking a look at starting with, you know, what is your strategic objective? Are you trying to reduce your time to market, reduce your costs? And then understanding, first and foremost, what is going on around you? What's in your ecosystem that you need to be thinking about? Who are all your stakeholders? What do they value? And then thinking about this from multiple dimensions, where IT information data is a key enabler, but there's a lot more going on in terms of understanding what are your processes? What kind of information do you need? How do you reduce the complexity of these large enterprises by looking at these things and the pieces and then putting them back together again? So you made the point that it's not just the information technology silo, it's cross-organizational. That said, information technology permeates virtually every part of our lives, every part of organizations, much more so than 20 years ago, even much more so than 10 years ago with systems of engagement. Has that made your mission harder or easier? Well, a little of both, actually. So in some ways, because it's such a key enabler, it allows you to do things you could never dream of doing before. So you can come up with new business models, new ways of doing things that you couldn't do before because you now have access to all this information and data very quickly. However, it can also, people can go down this whole rail, it's like, well, let's just put in a new IT system that's going to fix everything and it actually causes more havoc and actually causes more trouble. So I think it's a very key enabler, but it needs to be used in an effective manner. So how is what you're involved in, it sounds a little bit like Alignment Circa 2014 and some of that in there, but what's new and different? So I think it's getting, first of all, working with executive teams and working with getting people to step back and say, okay, not only where do I want to go, but where am I right now and then how do I determine where should I go, where could I go, but taking into account not only what's happening today, but what are the trends out there? What's going on around me? What are my stakeholders wanting? So people today, if you think back about when you bought a laptop five years ago, what you look for and what did you look for today? What are the populations that are going to be using your products and services? How is that going to change? Presenting a more systematic approach based on concepts of systems engineering and organizational change to think about, okay, where am I now, but where do I want to go and how do I get there? So the approach that you talk about is a holistic approach, right? Yes. There are many organizations who are taking an approach that is more maybe siloed, maybe fragmented. What are some of the biggest challenges you've noticed when you've gone into organizations that you've looked at? Typically when you go in, what does the situation on the ground look like? Is it just a complete disaster zone or what does it typically look like from where they are, from where you want to go? So oftentimes, I would refer to as a very reductionistic approach, the very siloed approach. And in fact, we've identified a number of failures, and oftentimes I come in when they have gone through these failures and say, oh my gosh, how do we do this differently? And just a few examples would be like, well, when in doubt, let's just reorganize and evolve in through this, where look, if we come up with a new organization structure, that's going to fix everything. Or if you go back to Netflix as an example, a few years ago, they decided to divide up their online streaming company from the DVD, and they wanted to split it into two. And they didn't really check with the stakeholders. So oftentimes they don't understand, what do all of their stakeholders want or need? And they got blasted, and of course they quickly changed, and now they're doing very well. The other thing that oftentimes we work with organizations that have grown very rapidly because they've had some amazing new product or technology, but now they're at a stage where like, okay, I've got this new technology, but I don't know how to design the organization, the process, the infrastructure, the information to really take advantage of that. So frequently I come into an organization, and they've tried a lot of different things, and they say, well, this isn't working, can you help us step back and think about this? And they're actually the ones that are great because they get it. Right, so they bring you in because they recognize they have a problem versus those that maybe don't know or they even have a problem or they're missing out on some potential benefits if they were to apply a better approach to how they organize and manage their information and their larger business. Right, right. So obviously part of the process has got to be getting the stakeholders within an organization to cooperate, to kind of see eye to eye on a number of issues. How do you actually go about doing that kind of thing, aside from the technology, actually getting stakeholders in business and IT and operations and other departments to actually start communicating? So one of the most effective things that I have done, and I've done this in all different sized organizations, including doing this with the Department of Defense and having three star generals all in the same room from all those different parts of the organization, from the operations, from the design, from the human resources, the IT, all the finance, and getting them all in the same room to understand, first of all, who are those stakeholders? What do they value? And oftentimes they know what they want from their stakeholders, but they don't understand what their stakeholders want from them. So it's getting them in a facilitated sessions to start talking to each other, to also then to understand what's currently working and not working. And usually what they come in with, thinking is a solution, and after they go through this exercise, they say, oh my gosh, we didn't realize we were doing this to you, and so let's fix that as we go forward. And then getting them to create a shared vision for where they want to go. And oftentimes they each have a vision of where they want to be. And this is not a vision statement. It's like, what is it going to be like to be in this organization five years from now? What are the products going to look like? What are the processes? Are we going to have standard processes? What kind of information are we going to need to support this new way of doing things? And getting them to collectively find this and share it and create it in a way that they can share it out with their whole organization, so it's not just the executive team, and then get them thinking about the future and what are some different options for how they might actually architect or design their future state. And the future state could be one year, two year, five years. And for rapidly changing companies, sometimes it's very short time scale. But it's getting them to think about things before they just go out and start changing everything. And using a little bit of analytical tools to say, okay, which of these options are going to serve me better? And almost invariably where someone comes in and says, oh, I think we need to do this like the organization or the new technology. They come back and they say, wow, if we need to do maybe these things and get them to brainstorm all these different ideas of which they then start to formulate and some things get thrown out and other things they start to mix and match together to something they never thought of individually. How prescriptive, when you work with organizations, how prescriptive do you get specifically with the role of the CDO? How often does that come up? What do you advise people in terms of that role? I wonder if we could talk about that a little bit. Sure. Well, data and information, I mean, they run everything within the organization. And what has really changed, I think, is, in fact, when I first started talking about these kinds of things with a group of CIOs and I started to say, gee, you need to talk about all the pieces, the enterprise, and then the information technology supports that. I was like, okay, how are they going to relate to this? And it turns out they applauded because they say you make our job much easier because once you get this strategic direction and everyone agrees on that, then you can say, okay, well, of course we need this new data system or we need this kind of data to run our business. And we don't need all these other things we probably ask you to do. So it actually simplifies, it gives more power to what they need to do and more authority because people recognize how critical their work is. Okay, so there's consensus that data is sort of a new driver of value. Is there a consensus that there needs to be a data czar or a chief data officer? Well, I don't know if there's consensus yet. I think that's evolving. And I think the more progressive organizations are definitely doing that. I think they're realizing that you can't have everyone going off and doing everything separately. On the other hand, there's also this movement towards distributed things. And I think part of the challenge that needs to be done up front in the strategy piece is saying, okay, what things do we want to standardize? Do we need to standardize on across our whole organization, our common definitions, common data definitions? And then what things does it really not matter that if this person in their office or in this location does it their way and it's a little different, it's okay. And I think that's where we've changed. So that example you just gave, that's clearly not the role of the CIO. So that's a nice clean cut situation. So my follow-up was going to be, okay, in situations where there needs to be a CDO or there needs appropriate, the prevailing thought at this event is that it really shouldn't report into the CIO. And the example you just gave is maybe a good reason why. But generally speaking, do you agree with that? And what happens to the role of the Chief Information Officer if that's the case? Well, I think they need to be tightly integrated. I don't think you can totally separate the CIO and the CDO. I think where they report is very much a function of the culture of the enterprise that they're operating in. I think they have to have enough access to the CEO or the C-suite in general to make sure that they're understanding what the strategic issues are. And to actually help to drive some of these kinds of critical strategic questions. But I think reporting higher in the organization is an essential piece to that. But there's dissonance when you talk to folks. And you're good at the middle of the Venn diagram, your area of expertise. You've got one school that says, oh yes, it should be a separate role. The CIO really should be keeping the lights on, worrying about infrastructure availability. And then the other end of the spectrum is, no, that's the CIO's job. It's information is his or her middle name. How do you... Well, I don't think if you totally separate them, then you're back to the reductionistic silo thinking. So I think they have to be integrated along with a whole lot of other things than the enterprises have to be integrated. I think they can have responsibility for certain things. But there also has to be this overlap between them as well as overlap with other key strategic directions on where the organization is going and what their business models are going to and how they want to operate and all of those things. So I don't think you can totally separate them. Do you need, if the organization is long enough, you need to give them enough power and autonomy to do what they need to do, but you can't totally segregate them? So, organizationally then, should those two roles at least report into the same individual or can they report to a separate individual? What's that point of integration, I guess, organization? I think it probably is better if they report to the same individual, I would think, just because this is an integration you really want to be very tight. There's other things that... But even if you go into a lot of companies that have, say, an engineering and manufacturing, and they report typically into the same person, it's because you need to integrate across those and that's where I've had a lot of experience. Isn't that compulsory, I mean? Well, it's... Pretty much, table stakes or...? It sort of makes... It certainly makes a lot of logical sense to do that. But I think in the past, they've had the operational side of the house sort of... Oh, yeah, of course we need to do that and they've ignored the data, CIO information side, and they kind of put them maybe over here, sometimes even under finance or some other place. Now I think they're seeing how mainstream this really is. Can you talk about situations, organizations, maybe that you've worked with or studied where they've succeeded at such an initiative and what the impacts have been? So we often have... We've worked with a number of different organizations that have, again, from very small to very large and without naming specific names, where they were going off in a certain direction and they were oftentimes... Oh, actually, I'll give you one, we were looking at a hospital system and they said, help us do the emergency department, help us fix this, and we said, okay, we'll come in and look at the emergency department, but we're also gonna look at your whole hospital. So I'm gonna use a fairly simple contained example here. And when we got in there and started really looking at things, they wanted to put in some new technology to check people into the waiting room faster. So they were taking this, let's do a technology solution, right, and because we think that's gonna help fix this. Well, we got in there and looked at the whole thing from a total system standpoint. We said, gee, and they happened to have their primary care group right there as well. In fact, now 30% of people were in the emergency department because they couldn't get in to see their primary care physicians. And then they also had another big group of people who were stuck in an emergency because they couldn't get into the, they were needing to be admitted into the hospital and they didn't have beds ready upstairs. They had rooms, but they just didn't have the beds made up or they couldn't get things back from the lab. So when you look at this from a total system, and so kind of the redesign that they worked through, one of the ultimate solutions is they opened an after hours walk-in clinic, for example. It took a huge thing out of there. They also did some work to signal up the inpatient that they, hey, they need to get some rooms cleaned up and they fixed their lab turnaround time. So they solved the problem totally differently and they totally reduced the waiting times. Okay, so that's one, I was gonna ask you, common mistakes, that's one, just try to be too focused on solving a particular, some customers are complaining or patients are complaining, oh, let's fix that problem. Exactly. And now you've got a bunch of people waiting to get in. Right, oh, that happens all the time. Nobody can handle it at the back end. Very, very common situation, I'm sure, in any kind of systems design. What other mistakes do people make that you advise that they be careful to avoid? Well, I think in particularly for this audience is starting with the IT data system as a solution before they really understand the problem and going in and just think, okay, we're going to put in this brand new system and they might actually need the system but we know from studying ERP failures, et cetera, that a big problem is that they didn't go in and look at the other dimensions, the processes, the organization, the policies and how those things work. So a big mistake is just fixing one piece or thinking the IT or technology is going to be the answer. So there was a number back in maybe 10, 15 years ago that some large proportion of information technology projects failed to meet their objective. I forget what the number was, it was north of 40% of what we call. It's a large number, right. And so, I don't know where that number came from, I don't know if you've ever studied it but I presume the reasons are the ones that you're suggesting. They're absolutely and this is really what got me motivated to be doing work in this area because I found people were going in and doing solutions and they were doing kind of a shotgun approach to these solutions as opposed to stepping back and then taking a little more holistic view of, okay, where are we going, what's going on and how do we align all these different pieces, not just the putting in the new technology or new IT or new data but how do we align the organization, the process, the knowledge to do a better job at providing products and services. So my question is, has that gotten worse or better? With the M&A craze, potentially that kind of stresses that dynamic. Well, it certainly does and actually if you look at the same issues there too, if you look at why have mergers and acquisitions failed, it's not because they didn't have good products or good things and they didn't have good reasons to merge. It was all about how do you put these all together? How do you merge the cultures of these different organizations? How do you merge the processes and the technologies as well as the IT systems and everything else? So the approach that you outlined, and correct me if I'm wrong, but would it be fair to characterize that as a top-down approach where you're taking the key stakeholders or the CIO, the CMO, bringing them into a room and getting them to see kind of from the other people's perspective? But then there's clearly a big change management component. You've got to keep things running while you're making changes and you've got to get more of the rank and file to adopt these changes. How do you go about actually implementing some of these things along that line? So a plan and all this great stuff without implementing is just on the shelf. And unfortunately, we've seen a lot of that happen. So a very key part of this and a key part of the process that we have put together for this includes the transformation implementation plan. And so it starts with, yes, getting the senior people on board, bringing other people in those. So you're getting the pulse of what's going on with your employees, your suppliers, your partners, your customers. But then as you go to roll this out, there's a whole major aspect of this. How do we create this? And now that we have this shared vision, how do we share this now with all of our employees through whether it's town hall meetings or now electronically, there's all kinds of newsletters and blogs, et cetera. And that you're out there doing this on a very active basis. And this takes much more time than the actual creation of the plan. And it's getting them engaged and involved in doing that. And that's absolutely critical. I've worked in industry for a long time before coming to MIT. And I saw a bottom up or middle approach and that doesn't work at all. Only top down does not work either. But doing the top kind of down first, as far as a strategy, as far as where are we going and creating that. And then bringing the people along with you. Ideally, as you're going through the planning process and you're bringing people in to share that with them. All right, we have to leave it there. Professor Nightingale, thanks so much for coming on theCUBE. I really appreciate it. All right, keep it right there, everybody. We'll be right back with our next guest. This is theCUBE. We're live from MIT in Cambridge. We'll be right back.